Go-to-Market (GTM) Strategy - India

Market Size and Growth Rate

The Indian market offers a prime opportunity for business expansion, driven by its vast population, growing purchasing power and expanding middle class. This segment, crucial for economic growth, is expected to rise from 32% in 2020-21 to 63% by 2046-47. India’s purchasing power has steadily increased, reaching 23 LCU per international dollar in 2022, up from 19 in 2003. Additionally, GDP per capita grew by 6.7% in 2022, reaching $2,380.

Currently, the middle class makes up 31% of India’s total population, projected to grow to 38% by 2031 and nearly 60% by 2047. This expanding middle- and high-income demographic is driving greater disposable income and consumer spending, creating a favorable market for businesses across various sectors.

Among Indian cities, Bengaluru led in purchasing power in July 2023 with an index score of 129. Increased access to credit and rising incomes have significantly influenced consumer behavior, with the number of credit card holders nearly doubling from 29 million in 2017 to 62 million in 2021. As of September 2024, Pune emerged as the top city for local purchasing power with an index score of 150, followed by Gurgaon and Hyderabad.

Consumer Behavior in India

Understanding India’s distinct purchasing habits, preferences, and demographics is key for businesses looking to succeed in this diverse market. Indian consumers tend to prioritize value, seek affordability, and favor products that align with local preferences, sustainability, and digital trends.

1. Purchasing Habits

A 2023 survey found that nearly 50% of Indian consumers prioritize value for money, actively comparing prices, hunting for discounts, and looking for special offers before making a purchase. The rise of e-commerce has transformed shopping behaviors, particularly among millennials and Gen Z, who favor the convenience and variety offered by online platforms.

2. Consumer Preferences

Indian consumer choices are shaped by culture, region, and income levels. While quality, authenticity, and personalized service are highly valued, many consumers prefer local brands over international ones. Despite a booming e-commerce sector, 85% of India’s retail market still operates through traditional stores, comprising around 13-14 million outlets. However, there is a gradual shift toward sustainable and socially responsible purchasing, reflecting changing attitudes.

3. Demographics

India’s diverse population, spanning different religions, languages, and traditions, results in varied consumer preferences. The expanding middle class is fueling greater purchasing power, while millennials and Gen Z—deeply influenced by social media and digital trends—are reshaping consumer behaviors. With 36.6% of the population living in urban areas, this segment enjoys higher disposable income, better infrastructure, and access to a wider range of products and services.

India’s Trading Landscape

India is actively working to diversify its export portfolio beyond traditional sectors like iron ore and agricultural commodities. The government aims to boost exports in electronics, engineering products, pharmaceuticals, and food items. Additionally, the Ministry of Commerce is exploring new export categories such as alcoholic beverages, confectioneries, pre-cooked meals, and value-added fruits like jackfruits and bananas to enhance India's global trade presence.

According to data from the economic think tank GTRI, China became India’s largest trading partner in FY 2023-24, surpassing the U.S., with total bilateral trade reaching USD 118.4 billion.

India’s exports to China saw an 8.7% increase, reaching USD 16.67 billion, driven by demand for iron ore, fruits and vegetables, cotton and yarn products, spices, and plastic. Meanwhile, imports from China grew by 3.24%, totaling USD 101.7 billion, primarily in high-tech products such as telecom and smartphone components, PCs, and laptops, as well as plastic, steel, chemicals, and iron.

Key Industries Driving the Indian Market

Key Sectors

Several high-potential industries power India’s rapidly growing economy. Sectors such as technology and IT services, e-commerce, healthcare, renewable energy, manufacturing, and agriculture present significant opportunities for both local and international businesses. These industries not only support economic growth but also cater to the rising consumer demand across various segments.

1. Information Technology (IT)

India’s IT sector plays a crucial role in the economy, contributing around 8% of the country’s GDP, with projections to reach nearly 10% by 2025. The industry benefits from a highly skilled workforce and supportive government policies, making it a global hub for cloud computing, digital transformation, artificial intelligence (AI), and machine learning (ML). Additionally, India’s strong foundation in business process outsourcing (BPO) and software services positions it for sustained growth in the coming years.

2. E-commerce

India’s e-commerce sector has experienced remarkable growth in recent years, making it the 7th largest e-commerce market globally, with projected revenues reaching $123 billion in 2024. This rapid expansion is driven by increasing internet penetration, a growing preference for online shopping, and widespread smartphone adoption.

E-commerce’s contribution to India’s GDP is expected to reach $300 billion by 2030, reflecting its crucial role in the economy. Leading companies like Amazon, Flipkart, and Paytm Mall continue to shape the industry, catering to the rising demand for digital shopping experiences.

3. Renewable Energy

India has significant potential for growth in renewable energy and currently ranks third globally in renewable power capacity additions, contributing 5% of its GDP to the sector. The country has set an ambitious target of 450 GW of renewable energy capacity by 2030, with 280 GW from solar power, 140 GW from wind energy, and 30 GW from bioenergy.

To support this transition, the Indian government has introduced various incentives, including tax benefits, subsidies, and grants, along with regulatory measures to facilitate project development and integration into the power grid. Initiatives such as the Solar Energy Corporation of India (SECI) and the National Solar Mission are driving solar power expansion nationwide.

India is also home to large-scale renewable energy projects, such as the Rewa Ultra Mega Solar Park in Madhya Pradesh, one of the largest solar parks in the world with a 750 MW capacity, spanning 1,590 hectares. Similarly, Gujarat’s Kutch Solar Park, with a 30 GW capacity, aspires to become the world’s largest solar park, attracting both domestic and international investments.

4. Healthcare

India’s healthcare sector has been one of the fastest-growing industries, driven by a large population, rising healthcare spending, and increasing awareness of personal health and well-being. In 2021-22, healthcare expenditures accounted for 2.1% of India’s GDP.

Foreign direct investment (FDI) in healthcare has also surged, growing from $2.6 billion in 2000 to $52 billion in 2019-20. Government initiatives such as Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY), and efforts to improve healthcare access in rural areas have played a crucial role in the sector’s expansion.

Additionally, digital health innovations, advanced diagnostics, and telemedicine are transforming the industry, making healthcare more accessible and efficient across the country.

Establish Your Business in India

Setting Up Business in India

Expanding into India presents a wealth of opportunities, but businesses need a strategic approach to navigate the market effectively. Understanding consumer preferences, market trends, and regulatory frameworks is crucial for a successful market entry.

Distribution Channels

1. Online Platforms: Online retail has witnessed a massive surge in India, with 127 million online shoppers recorded over the past three years. This number is expected to grow by another 85 million by 2025. Businesses can leverage major e-commerce platforms like Amazon, Flipkart, and Myntra to reach a broad customer base, particularly in urban and semi-urban markets.
2. Retail Partnerships: Partnering with established retailers such as Reliance Retail, DMart, and Croma provides businesses with access to extensive distribution networks and strong customer bases. These collaborations allow companies to benefit from market expertise, in-store promotions, and engaging shopping experiences.

1. Direct Sales: Direct selling offers brands greater control over distribution and customer relationships. India’s direct sales sector grew by 5.5% in the 2021-22 fiscal year, emphasizing the importance of personalized customer engagement and direct interactions in building strong brand loyalty.

Additionally, the international retail landscape in India is expanding rapidly, with global brands entering through strategic partnerships. Companies like Aditya Birla Fashion and Retail Limited and Reliance Brands Limited have collaborated with Armani, Hugo Boss, and Reebok, reflecting India's growing e-commerce capabilities and increasing consumer demand.

How to Do Business in India

Starting a business in India requires a systematic approach and a well-defined market expansion strategy. Companies must carefully assess market niches, consumer behavior, and industry trends to develop a go-to-market strategy that aligns with India’s regulatory environment, competitive landscape, and cultural diversity. A strategic entry plan ensures smooth operations and long-term success in one of the world’s most dynamic markets.

India Market Entry Strategies & Business Models

India has emerged as a key business destination, offering a dynamic economy, a highly skilled workforce, and a strategic geographical location that provides access to global trade routes. The country’s ease of doing business ranking has significantly improved, moving from 142^nd place in 2014 to 63^rd in the World Bank’s 2020 report, reflecting its business-friendly policies and economic reforms.

Though the World Bank has paused its ease-of-doing-business rankings, India’s business-friendly policies—such as GST implementation, digital initiatives, and bankruptcy reforms—have significantly boosted foreign investments. As the country recovers from COVID-19, many global businesses are focusing on market entry strategies that align with local preferences, regulatory requirements, and long-term growth objectives.

To successfully enter and operate in the Indian market, businesses must adopt a well-structured strategy that considers strict regulatory norms, evolving economic conditions, and a diverse consumer base. Below are some key go-to-market entry strategies:

Franchising Model

Franchising allows a parent company (franchisor) to grant another business (franchisee) the rights to use its brand, products, and business model in exchange for fees and ongoing royalties. The Indian franchise market is valued at $47–48 billion, growing at a rate of 30–36% per year, and contributing 5% to India’s GDP. This model is widely used by global brands expanding their presence in India.

Wholly Owned Subsidiary

A wholly owned subsidiary allows foreign companies to establish full control over their Indian operations without needing a local partner. Regulated by India’s Companies Act, 2013, this model is often referred to as a Greenfield Investment. The Foreign Exchange Management Act (FEMA) permits 100% foreign direct investment (FDI) in key sectors like manufacturing, e-commerce, and IT through an automatic approval route.

Joint Venture (JV)

A joint venture enables foreign businesses to partner with local companies, helping them navigate India’s market landscape, establish local networks, and access essential resources. This model is particularly useful for industries that require local expertise, regulatory approvals, or distribution networks.

Limited Liability Partnership (LLP)

An LLP combines the flexibility of a partnership with the limited liability benefits of a corporation. Under FEMA, 100% FDI is allowed in LLPs operating in sectors where automatic route investments are permitted. LLPs require fewer compliance regulations than corporations, making them an attractive option for foreign businesses.

Branch Office

Foreign companies can establish branch offices in India to carry out operations such as consulting, R&D, and customer support. However, they cannot engage in retail trading, manufacturing, or processing. Companies seeking to establish a branch office must demonstrate profitability over the past five years or have a minimum net worth of $100,000, with approval from the Reserve Bank of India (RBI).

Liaison Office

A liaison office functions as a communication bridge between a foreign company and India. While it cannot conduct business, generate revenue, or enter contracts, it plays a vital role in market research, networking, and regulatory compliance assessments for businesses exploring market entry.

Legal & Regulatory Compliance

Setting up a business in India requires compliance with legal frameworks, regulatory approvals, and tax structures.

Company Registration

Businesses must register with the Ministry of Corporate Affairs (MCA) and choose a legal entity such as:

• Private Limited Company
• Public Limited Company
• Limited Liability Partnership (LLP)

As of January 2023, over 1.5 million companies were registered in India.

Licenses and Permits

Depending on the industry, businesses require specific licenses and permits such as:

• Udyog Aadhar Registration (for MSMEs)
• FSSAI License (for food businesses)
• Import Export Code (IEC) (for international trade)
• Shop and Establishment Act License (for retail businesses)

Business Registration

All businesses must comply with national registration procedures, including:

• Acquiring a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN)
• Registering for Goods and Services Tax (GST) and obtaining a GST Identification Number (GSTIN)

Labor Laws & Tax Regulations

Businesses must adhere to India’s labor laws and tax policies, ensuring compliance with regulations such as:

• Factories Act, 1948
• Contract Labor Act, 1970
• Building and Other Construction Workers Act, 1996

They must also provide employee benefits, health insurance, and paid leave while ensuring proper tax compliance.

FDI & Investments in India

India has emerged as a top destination for Foreign Direct Investment (FDI) due to pro-business reforms, rapid economic growth, and a skilled, young workforce. The country currently ranks 68th in the Global Competitive Index and continues to attract significant foreign investments. In FY 2021-22, India recorded an all-time high FDI inflow of $83.57 billion, reflecting the confidence of global investors in its market potential.

Sectors such as IT, telecommunications, and automobiles have been primary beneficiaries of FDI during this period. The technology sector has particularly attracted global investments due to India's strong IT infrastructure and skilled workforce. Similarly, the automobile industry has seen increased foreign investments, especially in electric vehicle (EV) manufacturing and sustainable mobility solutions.

The government has introduced several initiatives to boost FDI inflows. One of the key programs is the Production-Linked Incentive (PLI) scheme, launched in 2020 for electronics manufacturing. This initiative aims to attract foreign investments by offering tax incentives, relaxed regulations, and easier access to land resources. The success of the PLI scheme has encouraged its expansion into other sectors such as automobiles, pharmaceuticals, and textiles.

These FDI-driven initiatives have led to a significant increase in job opportunities and overall economic growth. By fostering industrial development and innovation, foreign investments continue to strengthen India's position as a global economic powerhouse.

How to Scale a Business in India

Scaling a business in India requires a holistic and adaptive approach to navigate the country’s vast diversity and dynamic markets. Businesses must embrace agility, omnichannel strategies, and strong local partnerships to meet evolving consumer demands and expand successfully.

India B2B Go-to-Market Strategy

To effectively enter and expand in the B2B market, companies must develop a deep understanding of India’s business landscape, market trends, and consumer behavior. Key sectors offering strong B2B growth potential include:

• IT & Digital Services: Driven by global outsourcing demand
• Pharmaceuticals: A major hub for generics and research
• Automotive: Growing interest in electric vehicles and components
• E-commerce & Logistics: Expanding digital and supply chain networks

Businesses can leverage local partnerships, invest in digital transformation, and tailor solutions to India’s unique market needs for sustainable B2B success.

Investment Opportunities in India

India offers robust investment opportunities across multiple sectors due to:

• A large consumer base and rising middle class.
• A rapidly growing economy with favorable policies.
• Government initiatives supporting foreign and domestic investment.

Infrastructure Investment in India: Current & Future Plans

India has made infrastructure development a priority, launching major initiatives in transportation, energy, and digital connectivity to drive economic growth.

1) Roadways

• India has one of the world’s largest road networks, spanning 6.3 million kilometers.
• Bharatmala Pariyojana aims to develop 34,800 kilometers of highways to improve connectivity and logistics efficiency.

2) Railways

• India ranks fourth globally in railway network size, with over 13,000 km of tracks as of 2023.
• Investments focus on high-speed trains and freight corridors, including:
  • Delhi-Mumbai Industrial Corridor (DMIC) – A high-speed freight corridor connecting Delhi and Mumbai.

3) Airports

• India has 138 operational airports, with plans to expand to 300 by 2047 to meet growing demand.
• UDAN (Ude Desh ka Aam Nagrik) – A regional connectivity scheme making air travel more affordable.
• Major Greenfield Projects:
  • Navi Mumbai International Airport
  • Jewar Airport (Noida International Airport)

These developments will strengthen India’s infrastructure, enhancing business efficiency and global trade connectivity.

Energy Sector in India

India ranks third globally in electricity production and consumption, with an installed power capacity of 442.85 GW as of April 2024. The country relies on a diverse energy mix, including:

• Coal & Natural Gas: Dominant but gradually being replaced by cleaner alternatives.
• Hydroelectric & Nuclear Power: Contributing to India’s stable energy supply.
• Renewable Energy: A rapidly expanding sector backed by government initiatives.

Electricity Generation Growth

• FY21: 1,373.08 BU
• FY22: 1,484.36 BU
• FY23: 1,617.72 BU

Moreover, the Indian government has prioritized sustainability and clean energy through key initiatives, such as:

• Ultra Mega Power Plants (UMPPs) – Large-scale thermal power projects aimed at enhancing energy efficiency and reducing carbon emissions.
• National Solar Mission – A flagship program under India’s renewable energy strategy, targeting 100 GW of solar power capacity by 2030.

These initiatives are designed to increase the share of renewable energy in India's overall energy mix while ensuring energy security and sustainability.

Mobile Networks and Internet Connectivity

India has the world’s second-largest mobile user base, with over 1.2 billion subscribers and more than 624 million internet users as of 2023. To improve network access in underserved regions, the government launched the BharatNet initiative to provide high-speed connectivity to rural areas. This initiative aligns with the Digital India program, which seeks to bridge the digital divide by making internet access more affordable and widespread. Additionally, 5G networks are currently being tested in select urban areas, paving the way for enhanced connectivity and digital transformation.

Government Initiatives for Infrastructure Development

India has introduced several large-scale infrastructure projects to strengthen its economy and improve connectivity across key sectors:

• Bharatmala Project: A national highways development initiative aimed at enhancing road connectivity across the country.
  • Objective: Strengthen the transportation network, reduce logistics costs, and boost trade and commerce.
• Sagarmala Project: A port-led development initiative focused on modernizing ports and establishing coastal economic zones.
  • Objective: Enhance maritime trade, improve connectivity, and create employment opportunities.
• Digital India: A nationwide program designed to transform India into a digitally empowered society and knowledge economy.
  • Objective: Expand digital infrastructure, improve access to technology, and enhance e-governance services.
• Smart Cities Mission: An urban renewal initiative aimed at developing 100 smart cities with modern infrastructure and sustainable solutions.
  • Objective: Improve quality of life, enhance urban services, and attract investment opportunities.
• Make in India: Launched in 2014, this initiative encourages both domestic and foreign companies to manufacture their products in India, strengthening the country's industrial base.
  • Objective: Boost the manufacturing sector, create jobs, and drive economic growth.
  • Impact:
    • FDI inflows have doubled, reaching $83 billion in 2021.
    • India has consistently attracted high levels of FDI, peaking at $84.8 billion in 2021-22 from 101 countries across 31 states and union territories.
    • Economic reforms and an improved Ease of Doing Business ranking position India to attract $100 billion in FDI in the near future.

Raw Material Accessibility in India

India is rich in natural resources, providing a diverse range of raw materials that support various industries. Its geographical and geological advantages contribute to abundant reserves of minerals, metals, and agricultural commodities. Key raw materials available in India include iron ore, coal, bauxite, copper, and wheat, all of which play a crucial role in industrial growth.

Impact of Raw Material Availability on Key Industries

1. Automotive Industry

The Indian automotive sector has grown significantly, driven by the local availability of essential raw materials such as steel, aluminum, and rubber. According to the Ministry of Steel, India’s steel production grew at a 4.3% rate from 2017-18 to 2021-22, reaching 122 million metric tons. Additionally, with 770,000 metric tons of natural rubber produced in FY 2022, the industry benefits from cost-effective and readily available resources. Major manufacturers like Tata Motors have expanded operations to meet rising demand, leveraging domestic raw material supplies to enhance production efficiency.

2. Textile Industry

India is one of the world’s leading producers of cotton, making it a key player in the global textile market. Approximately 68% of India's cotton comes from rain-fed regions, while 35% is from irrigated areas. However, in terms of productivity, India ranks 38th globally, with a yield of 510 kg/ha. The abundant cotton supply has attracted both domestic and international textile manufacturers, leading to increased investment in India’s textile sector.

3. Steel Industry

India is the second-largest producer of crude steel globally, backed by 35 billion tons of coking coal reserves and substantial iron ore deposits. These resources have fueled rapid growth in the steel sector, attracting investments from major players like Tata Steel and JSW Steel. The expansion of domestic steel production not only strengthens the industry itself but also supports the construction and infrastructure sectors, reinforcing India's position as a global steel powerhouse.

Government Initiatives to Enhance Raw Material Availability

The Indian government has introduced several policies to promote sustainable resource utilization and strengthen domestic industries:

• National Mineral Policy (2019) – Aims to ensure sustainable mining and mineral development, promoting exploration, efficient extraction, and value addition.
• National Steel Policy (2017) – Focuses on increasing domestic steel production and consumption, ensuring raw material security, and adopting advanced technologies for sustainable growth.
• National Biofuel Policy (2018) – Encourages biofuel production and usage by supporting raw material availability, research & development, and market expansion.

India's Offering to Your Established Business

How India's Promising Benefits Can Fuel Growth in Your Established Business

India’s attractive business environment is fueling the growth of established foreign businesses. With a rapidly expanding economy, a vast consumer base, and a skilled workforce, the country presents diverse opportunities for companies looking to expand operations and increase market share.

According to the Economist Intelligence Unit (EIU), India has improved its quarterly business environment forecast and climbed six positions globally in the Business Environment Ranking (BER) published on April 13. The country has moved from 14th to 10th place among 17 Asian economies, highlighting its growing appeal for international investment.

Numerous global companies have strengthened their manufacturing presence in India as part of the Make in India initiative. This campaign, now in its eighth year, has doubled foreign direct investment (FDI) to $83 billion. Notable multinational corporations expanding in India include:

• Xiaomi: Recently announced the establishment of an additional manufacturing plant, bringing its total to seven facilities. In collaboration with Flex, Xiaomi has set up a 1-million-square-foot factory in Chennai under the Make in India initiative.
• Micron: The U.S.-based semiconductor giant has committed $2.75 billion to build a semiconductor fabrication plant in Sanand, Gujarat, making it the first Indian state to host such a facility.
• Samsung, Hyundai, and other global players have also expanded their operations to tap into India’s growing market and benefit from government incentives.

Subsidies and Benefits

The Indian government offers a range of incentives to support business expansion, including tax exemptions, grants, and other financial benefits. Companies investing in India can access affordable labor, growing consumer demand, and crucial resources across key sectors.

Textile Sector: The government has approved the Production-Linked Incentive (PLI) scheme for the textile industry, focusing on man-made fiber (MMF) garments and technical textiles. Over the next five years, the scheme is expected to provide $1.3 billion in incentives, boosting domestic production and exports.

Production-Linked Incentive Scheme: Introduced in March 2020, the PLI scheme encourages domestic manufacturing by providing financial incentives based on incremental sales of locally produced goods. Key highlights:

• 64 textile investors have been selected for PLI incentives over five years.
• Foreign companies from the U.S., Japan, South Korea, Israel, Germany, and Sri Lanka have applied through their Indian subsidiaries.
• Gujarat leads in the number of proposed projects, while Madhya Pradesh has attracted the largest investment volume.
• The PLI scheme has been extended to multiple industries, including automobiles, pharmaceuticals, IT hardware (laptops, mobile phones, telecom equipment), white goods, chemical cells, and food processing.

Battery Subsidy: As part of its renewable energy push, the government is developing a major subsidy program for electricity grid battery production. The Ministry of Power has proposed a $2.63 billion production-linked incentive (PLI) subsidy to support battery cell manufacturing in India from 2024 to 2030. This initiative aligns with India’s commitment to clean energy adoption and self-reliance in advanced battery technology.

Pharmaceuticals Sector: India’s pharmaceutical industry is a global leader, ranking third in volume with a market size of $50 billion. The country accounts for 3.5% of global drug and medicine exports, supplying pharmaceuticals to over 200 countries worldwide.

To enhance industry resilience, ensure drug security, and boost domestic production of essential bulk drugs and high-value pharmaceutical products, the Department of Pharmaceuticals has introduced three key initiatives:

• Production-Linked Incentive (PLI) Scheme
• Production-Linked Incentive Scheme for Pharmaceuticals (PLI 2.0)
• Scheme for Bulk Drug Parks

These schemes are designed to attract international investment, expand production capacity, and reduce dependency on imports, making India a stronger global hub for pharmaceutical manufacturing.

Semiconductor and Technology Sector: India’s technology sector, particularly semiconductors, is emerging as a key player in global manufacturing, driven by government-backed initiatives aimed at building a self-sufficient semiconductor ecosystem.

The SemiconIndia 2023 event, inaugurated by Prime Minister Narendra Modi, reaffirmed India’s commitment to developing a robust semiconductor manufacturing infrastructure. As part of this strategy, the government has allocated $10 billion in subsidies to support semiconductor production.

This initiative is designed to attract leading global technology companies, offering 50% financial assistance for setting up semiconductor fabrication plants in India. With this support, the sector is expected to unlock up to $30 billion in total investments, positioning India as a major hub for semiconductor manufacturing and innovation.

Social Security Agreements: India has established Social Security Agreements (SSAs) with various countries to simplify social security obligations for international workers. These agreements benefit employees working abroad by:

• Allowing temporary work assignments without requiring duplicate social security contributions.
• Enabling the transfer of pension benefits across borders.
• Combining benefits accrued in multiple countries for eligibility.
• Providing the option to withdraw social security benefits when leaving a country.

As of 2023, India has signed SSAs with 20 countries, including Belgium, Germany, Switzerland, Denmark, Norway, Luxembourg, France, South Korea, the Netherlands, and Hungary, among others. This initiative facilitates seamless workforce mobility, enhances financial security for employees, and strengthens India's economic ties with partner nations.

India's Social Security Agreements (SSAs) provide three key benefits for international workers and Non-Resident Indians (NRIs):

1. Detachment (Temporary Work Assignments)
   • Workers temporarily assigned to another country can continue contributing to their home country’s social security system.
   • This exempts them from making social security contributions in the host country for a specified period.
   • To avail of this exemption, employees must obtain a Certificate of Coverage (CoC) from their home country’s social security authorities and present it to the host country’s authorities.
2. Exportability (Transfer of Pension Benefits)
   • Workers can receive social security benefits without any reduction in value, either in their home country or the host country.
   • This allows them to transfer pension benefits across borders or designate beneficiaries after retirement.
3. Totalization (Combining Social Security Benefits)
   • The total duration of an employee’s work in different countries is considered when determining eligibility for social security benefits.
   • The payout is calculated based on the combined work periods across countries, ensuring workers receive the benefits they have earned.

By signing SSAs with 20 countries, including Belgium, Germany, Switzerland, Denmark, France, South Korea, and the Netherlands, India facilitates seamless workforce mobility while safeguarding the social security rights of expatriates and international workers.

Extensive Double Tax Avoidance Agreements (DTAAs): India has established one of the world’s most comprehensive networks of Double Tax Avoidance Agreements (DTAAs) with over 85 countries. These treaties prevent double taxation and curb tax evasion, ensuring that businesses and individuals operating across borders are not taxed twice on the same income.

Key Benefits of DTAAs

• Fair Tax Allocation: DTAAs outline whether a country has taxation rights based on the source of income or the taxpayer’s country of residence.
• Reduced Tax Burden: Businesses operating in countries that have a DTAA with India can benefit from lower withholding tax rates and exemptions under both the Income Tax Act and the specific treaty.
• Encourages Trade & Investment: By eliminating tax obstacles, DTAAs facilitate international trade, investment, and technology transfer between nations.

Incentives, Subsidies, & Government Plans for Setting Up a Business in India

Expanding a business in India’s fast-growing, digitally driven market requires an adaptive go-to-market strategy that accounts for its vast cultural diversity and segmented consumer demand. The Indian government plays an essential role in fostering business growth by providing a range of subsidies, incentives, and funding programs to promote entrepreneurship and investment.

Subsidies and Grants for Startups

1. Funding Programs

The government offers financial support to startups at various stages of development through multiple funding schemes, including:

• Startup India Seed Fund Scheme (SISFS): Provides financial assistance to startups in the ideation and product development phase.
• Venture Capital Assistance (VCA) Scheme:  Supports startups with innovative business models in need of capital for scaling.
• Credit Guarantee Fund Scheme for Startups (CGFS): Ensures loan security for startups borrowing from financial institutions.

2. Incubation Support

To nurture innovation, the government has established incubators offering infrastructure, mentorship, and networking opportunities. Some key incubators include:

• Atal Incubation Centers (AICs) – Set up under the Atal Innovation Mission (AIM) to support startups across multiple sectors.
• Technology Business Incubators (TBIs) – Encourage tech-based startups by providing access to research and development resources.
• Bioincubators – Offer specialized infrastructure and technical support to startups in the biotechnology sector.

3. Mentorship Initiatives

Recognizing the need for guidance, the government has launched mentorship programs to connect startups with industry experts and investors. Notable initiatives include:

• Mentor India – A global initiative to provide mentorship to startups and early-stage businesses.
• NIDHI-EIR – Supports innovators and entrepreneurs with mentorship and financial assistance through incubators.
• AIM-iCREST – A structured mentorship program focused on robotics, AI, and deep-tech startups.

Through these strategic initiatives, funding programs, and mentorship networks, India continues to strengthen its startup ecosystem, encouraging domestic and foreign entrepreneurs to establish and scale their businesses successfully.

Tax Benefits and Exemptions

1. Corporate Tax Rates

India provides competitive corporate tax rates, reducing the overall tax burden for businesses. The current tax structure is as follows:

• Domestic Companies: Standard corporate tax rate of 30%, with reductions for eligible firms.
• Foreign Companies: Taxed at 40% on income earned in India.
• New Manufacturing Companies: Eligible firms benefit from a reduced tax rate of 15% under the 2019 tax reforms.

India’s revised tax structure is designed to boost economic growth and attract foreign investment, making it more competitive than markets like China and the U.S.

2. Tax Holidays

To encourage investment and economic growth, the Indian government provides tax holidays for specific industries and businesses. These exemptions can last between 5 to 10 years, allowing eligible companies to operate tax-free for a set period.

Key Benefits:

• Reduced Tax Burden: Startups and businesses enjoy income tax exemptions during the holiday period.
• Boost for Foreign Investors: Tax holidays make India an attractive destination for international companies looking to set up operations.
• Industry-Specific Incentives: Sectors like infrastructure, renewable energy, IT, and manufacturing often benefit from these exemptions.

3. Special Economic Zones (SEZs)

India has established Special Economic Zones (SEZs) to attract foreign investment and boost exports. Businesses operating in SEZs benefit from various tax exemptions and incentives, making these zones an ideal choice for companies looking to expand in India.

Key Benefits:

• Tax Exemptions: Relief from customs duties, central excise duties, and service tax.
• Ease of Doing Business: Simplified regulatory framework and fast-track approvals.
• Infrastructure Support: Access to world-class facilities, power, and connectivity.
• Geographical Advantage: Major SEZs are located in Tamil Nadu, Gujarat, Telangana, Kerala, and Haryana, offering strong industrial ecosystems.

Companies operating in Special Economic Zones (SEZs) enjoy a reduced corporate tax rate of 15% for the first five years, with gradual increases thereafter. This strategic incentive enhances global competitiveness and attracts multinational businesses to establish operations in India.

Impact & Growth:

• Over 280 operational SEZs as of 2024, fostering global and domestic business expansion.
• Increased job creation and economic development across key industrial states.
• Enhanced export capabilities, making India a prime hub for international trade.

Labor and Wages Scenario in India

Availability of Skilled Labor and Wage Structure

Labor Market Overview: India boasts a vast and diverse workforce of over 1.4 billion people, with a high labor force participation rate. However, unemployment levels vary across regions and industries, with youth and rural areas experiencing higher joblessness. To address these challenges, the government has launched various skill development programs aimed at enhancing employability and workforce readiness.

Minimum Wage: Minimum wages in India vary by state and industry, ensuring fair compensation across sectors. The country maintains one of the most competitive labor costs in Asia, with a national minimum daily wage of INR 176 (US$2.16), translating to approximately INR 5,340 (US$65) per month.

Average Wages Across Industries: Wages in India differ significantly across industries. On average, men earn INR 1,953,000, while women earn INR 1,516,200 annually. High-paying sectors include IT, finance, and healthcare, while industries like agriculture and construction offer lower average wages.

Key Factors Influencing Wage Levels

• Education & Skills: Higher qualifications and specialized expertise lead to better salaries.
• Demand & Supply: Wages fluctuate based on the availability and demand for specific skill sets.
• Industry & Location: Urban areas and high-growth industries typically offer better compensation.

Government Initiatives for Skilled Labor and Wage Growth

The Indian government has launched multiple initiatives to strengthen workforce skills and ensure fair wages:

• Skill India (2015): Aims to train over 400 million individuals in industry-specific skills.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Provides skill training and certification to enhance employability.
• National Apprenticeship Promotion Scheme (NAPS): Encourages businesses to hire apprentices, offering financial incentives to both employers and apprentices.
• Minimum Wages Act: Mandates fair wage structures across industries to protect workers from exploitation.
• Pradhan Mantri Rojgar Protsahan Yojana (PMRPY): Supports job creation by reimbursing employers for Employee Provident Fund (EPF) contributions for new hires.

India’s Global Influence & Strategic Partnerships

India’s Role in Global Trade and Investment

India has emerged as a key global player, strengthening diplomatic and economic ties worldwide. With a strong cultural heritage, a growing economy, and a strategic location, India continues to enhance its position as a trusted international business hub.

Trade & Investment Policies

Openness to Foreign Investment

To attract global investors, India has liberalized FDI policies, easing foreign ownership restrictions in various industries. This investor-friendly approach has led to significant economic growth and expansion opportunities for global businesses.

Promotion of Trade & Economic Cooperation

India has actively pursued bilateral and regional trade agreements to improve market access and eliminate trade barriers. Key agreements include:

• India-ASEAN Free Trade Agreement
• Comprehensive Economic Cooperation Agreement (CECA)

These frameworks facilitate seamless trade between India and its key partners.

Strategic Partnerships & Business Impact

India has established strong trade and economic alliances with several global powers, fostering opportunities across various industries.

U.S.

• A strategic partner in defense, technology, and trade.
• As of 2020, the U.S. approved $20 billion in defense sales to India.

Russia

• A long-standing defense partner, collaborating on military technology and joint exercises.
• Governed by the Agreement on the Programme for Military-Technical Cooperation.

Japan

• A key partner in economic growth, technology transfer, and infrastructure development.
• The 2011 CEPA trade agreement has driven bilateral trade to $21.96 billion in 2022-23.

Australia

• Strong cooperation in defense, trade, and education.
• In June 2020, the two nations upgraded ties, allowing reciprocal military base access for logistical support.

India’s dynamic labor market, competitive wage structure, and investor-friendly policies make it an attractive destination for global businesses. Additionally, its growing economic partnerships with key global players provide foreign companies with ample opportunities for expansion and collaboration.

India’s Commitment to Global Security

Peacekeeping Missions

India has been a steadfast contributor to United Nations peacekeeping missions, deploying personnel to conflict zones worldwide. Indian peacekeepers play a critical role in maintaining peace, ensuring stability, and providing humanitarian assistance in war-torn regions.

Counterterrorism Efforts

India is actively engaged in global counterterrorism initiatives, collaborating with international partners to combat terrorism. Given its history of facing terrorist threats, India recognizes the need for strong global cooperation in intelligence sharing, security operations, and diplomatic efforts to counter terrorism effectively.

Maintaining Regional Stability

As a key player in South Asia, India plays a pivotal role in maintaining regional stability. Through diplomacy and strategic partnerships, India works to de-escalate tensions and foster peaceful relations with neighboring countries. Its commitment to stability is crucial for promoting economic growth and regional development.

Market Entry Barriers in India

Despite its high-growth potential, entering the Indian market presents several challenges that businesses must navigate.

1. Stringent Regulatory Complexities

India’s regulatory framework is intricate, with sector-specific laws governing industries such as retail, healthcare, and finance. Businesses must comply with local, state, and federal regulations, which can be time-consuming and complex.

2. High Cost of Compliance and Taxation

Although the introduction of GST (Goods and Services Tax) simplified India’s tax structure, companies still face hurdles due to state-wise tax variations and compliance requirements. Understanding corporate taxation and regulatory policies is essential for foreign businesses to avoid financial and legal challenges.

India Market Entry: Challenges & Solutions

Setting up a business in India comes with bureaucratic and operational hurdles, but strategic planning can help overcome these challenges.

Challenges:

1. Bureaucratic Red Tape: The process of acquiring permits, licenses, and clearances can be time-intensive and complex.
2. Infrastructure Limitations: Roads, ports, and logistics networks may pose operational challenges, leading to delays and higher costs.
3. Cultural & Linguistic Diversity: India’s multicultural landscape requires businesses to adapt to regional languages, customs, and consumer behaviors.

Solutions:

• Leverage Expert Legal & Business Advisory Services: Hiring a local consultant or legal expert can help navigate complex regulations and compliance issues.
• Build Strong Government & Business Relationships: Partnering with business associations and government officials can ease market entry processes.
• Explore Alternative Funding Options: Seeking investment from angel investors, venture capitalists, or crowdfunding can help overcome financial constraints.

Our India Entry Strategy Consulting Services

We provide end-to-end support for businesses entering the Indian market. Our services include:

• Consumer & Market Planning: Understanding local market dynamics and customer behavior
• Demand & Supply Analysis: Evaluating industry trends and market potential
  Local Partner & Vendor Identification: Finding the right collaborators for seamless business operations
• Government Regulations Advisory: Ensuring full compliance with India’s business and legal frameworks
• Risk Management Strategies: Identifying and mitigating potential business risks.
• Growth Opportunity Exploration: Discovering avenues for scalability and expansion.

With the right strategy, businesses can overcome entry barriers and thrive in India’s dynamic market.

How We Assist Businesses in Analyzing Indian Market Trends and Achieving Their Goals

Expanding into India requires a well-structured approach to navigate its diverse consumer base, evolving regulations, and competitive business environment. Our go-to-market strategy is designed to help international businesses establish a strong presence in India by leveraging market analysis, localization, and strategic partnerships.

Our Strategic Approach

We provide a comprehensive market entry framework tailored to each business’s unique needs, ensuring a seamless transition into the Indian market.

• Market Analysis & Consumer Insights: Identifying emerging trends, consumer behavior, and competitive dynamics.
• Localization Strategy: Adapting products, branding, and marketing to match India’s diverse cultural and regional preferences.
• Regulatory Compliance & Legal Advisory: Ensuring adherence to government policies, taxation laws, and industry regulations.
• Partnerships & Vendor Sourcing: Connecting businesses with reliable local partners, distributors, and suppliers.
• Go-To-Market Execution & Growth Planning: Crafting a scalable strategy for long-term success and expansion.

Why Choose Us?

Our team of industry experts and market analysts has deep knowledge of the Indian business landscape. We assist businesses in navigating regulatory, operational, and cultural challenges, ensuring a smooth and profitable market entry. With our data-driven insights and strategic execution, businesses can confidently enter India, maximize opportunities, and accelerate growth.